Intel, a once-dominant force in the chipmaking industry now grappling with significant challenges, has appointed Lip-Bu Tan as its new CEO. Tan, a seasoned figure in the semiconductor realm and a former member of Intel’s board, will take the helm next Tuesday, following the departure of Pat Gelsinger, Intel’s previous CEO. Gelsinger’s sudden retirement earlier this year, amidst a plummeting market and a drastic restructuring that included massive layoffs, left many questioning the company’s independent viability.
At 65, Tan brings a wealth of industry experience to the role. He previously led Cadence Design Systems, a company pivotal in processor design software, and played a key role in Intel’s board until August last year. Tan will be rejoining the board while stepping into his CEO position. Frank Yeary, Intel’s interim Executive Chairman, believes Tan’s industry acumen and his proven track record in augmenting shareholder value make him the ideal candidate for Intel’s next phase.
Since Gelsinger’s exit, Intel has been under the temporary leadership of co-CEOs David Zinsner and Michelle Johnston Holthaus. Gelsinger’s tenure, which began with promise, culminated in disappointment marked by a severe decline in Intel’s stock price — a loss of 60% translating to $160 billion in shareholder value. The company also had to let go of 17,500 employees, about 15% of its workforce, and suspended dividends, ultimately facing a $19 billion annual loss.
More recently, Intel postponed the opening of two forthcoming chip factories in Ohio, a delay attributed to financial prudence. These facilities are expected to leverage $7.8 billion from the CHIPS Incentives Program, a government initiative launched during President Joe Biden’s term.
Intel, from its base in Santa Clara, California, played a pivotal role in establishing Silicon Valley’s tech dominance through the personal computer revolution, notably under the visionary leadership of ex-CEO Andy Grove. However, the company struggled to keep pace with the technological pivot to mobile computing heralded by Apple’s iPhone release in 2007, trailing behind more agile competitors.
The rise of artificial intelligence further exacerbated Intel’s woes, with rival Nvidia becoming synonymous with cutting-edge chip technology. Nvidia now commands a market value of $2.8 trillion, dwarfing Intel’s $90 billion. Yet, Tan’s appointment has fueled optimism, as reflected in a significant uptick in Intel’s stock price by over 10% following the announcement.
During Tan’s tenure at Cadence Design, the company saw a 44-fold increase in its stock price, a testament to his strategic leadership. His impact earned him the prestigious 2022 Robert Noyce Award from the Semiconductor Industry Association, a fitting acknowledgment named after one of Intel’s pioneering founders.
